What founders should know about hiring during a market downturn
As a founder, your instinct during any time of uncertainty is often to freeze hiring. Right now, with the effects of COVID-19 rippling through the economy, that’s what a lot of companies are doing.
But while the virus’s second- and third-order effects will be challenging for almost every business out there, the number of layoffs happening across the industry means that this is an opportune hiring moment for companies confident in the long-term.
There are three big things founders need to think about as they work on hiring during this time: risk, transparency, and the ability to adjust to changing realities on the ground.
As risk aversion rises, traditional recruiting pipelines may shrink
Early-stage startups typically focus a lot of their recruiting efforts on candidates that work at large tech companies, offering hires growth potential and more responsibility in exchange for greater risk.
In stable times, that tradeoff is often attractive to a large pool of potential recruits. But in volatile times, employees often prioritize stability, which means many of the usual startup hiring sources won’t be as active as they were before.
As a founder, there are several things you can do to make your startup a safer place to land. Talk to candidates about your long-term vision, but also talk about your unit economics—and your path towards profitability, if you’re not there yet. Consider converting some of the equity in your compensation to cash. And instead of waiting for candidates to come to you, redouble your outbound efforts.
Be on the lookout for opportunities to snap up talent
While some recruiting avenues may be less active than usual, new ones are opening up.
Layoffs happening across the industry are sending a flood of candidates onto the job market. Startups that are hiring have a unique opportunity to hire great talent and garner goodwill with the wider community.
Social media is an invaluable tool here. Make sure your company’s and team’s social media presences communicate clearly that you are hiring, and use it to stay alert to layoff announcements and posts from people looking for a new opportunity.
If you’re able, connect people to jobs even if they’re not at your company—and make sure other founders and VCs in your network know they can do the same for you.
Transparency is your most valuable asset
Transparency is always an invaluable part of startup recruiting, but from here on out, it’s going to be more important than ever before.
Most candidates are going to ask more questions than ever about your financials and your unit economics. Even if they don’t, it’s a good idea to bring it up when you talk to them: and be clear about where your strengths and vulnerabilities are as a business.
Startups live and die on the trust that exists between team members and founders—especially in tough times. Building that trust starts the first time that you get on the phone with a candidate.
Don’t be afraid to ask for help
The situation we’re going through is unprecedented, and it’s natural to feel overwhelmed — particularly as a founder, with a company and team to worry about.
Flexibility and the ability to adapt to changing circumstances are more important now than ever before — which is why it’s important that founders know when it’s time to ask for help to keep things moving.
Learn more about how Dover can help you attract and engage the best talent — or try us free.